FCC Favors Internet Education Fund

"The inventory clerk at Wal-Mart has more infotech in his or her hands than the average teacher," Pepper said.

Part of the money for the effort to educate the nation's youth is likely to come from an Internet universal service fund run by the Federal Communications Commission. The 1996 Telecommunications Reform Act directed the FCC to develop this new fund because the agency oversees the telecommunications and Internet business, which will be instrumental in building any wired education system.

The FCC wants to promote Internet access - not just cheap phone service - and is now working with states across the country to make sure schools are connected, Pepper said.

That fund would total about $2.25 billion annually, said Pepper. "This is not government regulation of the Net .... It is government stimulation," said Pepper.

The FCC plans to publish its proposed rules on the issue by early May, Pepper said at a March 12 conference called Digital Dilemmas: Defining Ethics in the Internet Age, held at Marymount University, Arlington, Va.

At the session, regulators and industry representatives agreed that rules governing the business of the Internet should be avoided as much as possible, but that government might need to jump-start the education effort.

However, officials at the FCC are still trying to work out how the money should be collected and how it should be distributed among programs intended to aid education, as well as people living in poor or rural areas.

Most companies, such as Washington-based MCI Communications Corp., oppose the fund-raising effort, dubbed universal service, fearing that it will slow their growth or give an advantage to their rivals, such as the regional Baby Bells.

Under the existing regime, which the 1996 Telecommunications Reform Act ordered to be supplanted by the emerging FCC-developed plan, the long distance companies charge their customers extra money to pay for infrastructure investments by the Baby Bells.

Unsurprisingly, communications, hardware and content companies differ on how the universal service money should be collected and spent, with each company favoring a plan that benefits it.

These conflicts are reflected on Capitol Hill, where prominent political and industry players have weighed in with their preferred plans.

A group of senators from rural states recently sent a letter to FCC Chairman Reed Hundt demanding that rural Americans be guaranteed cheap and reliable communications service, while Sen. John McCain, R-Ariz., the chairman of the Senate commerce committee, recently held a hearing to emphasize his opposition to regulation.